life time value

Force multiplier effect of Riding the Elephant

Affirmative action, life time value, Marketing, Marketing Stamina, Networking, Partners, relationships, Riding the elephant

While I keep writing about this concept, I am amazed myself by the amount of benefits that “riding the elephant” can have for you, if you nurture the elephant well. The elephant is very loyal and friendly creature if you take care of it and feed it with bananas. But if angered it also tends to go o a rampage and destroy things.

So if you nurture the elephant then while you can take 5 small steps, it can take one large one, so if you are riding it, you can cover a larger distance through the forest versus on foot. Also other wild animals won’t attack you when you riding the elephant.

Some of this is also true with hitching your bandwagon with a large partner (like an OEM) your market reach expands at an amazing speed. These large companies have massive growth agendas so they have big plans to execute and go out in the market. Once they start trusting you they will also take you along with them. You will need to do networking within these companies. Being large it is difficult to navigate through the matrix structure, but if you are determined, and take affirmative action you will be able to find your way. It may take time, so you need to have marketing stamina to last in the market.

As a small company you may not have the bandwidth to fund that kind of a growth, but with the help of the partner you can actually get the volume of business to fund your growth.

There’s once challenge though. Since the partner wants to grow rapidly they will expect you to comply with their demands in terms of the margins you make. These situations you have to manage delicately. What can help is knowing the life time value of a customer. So you know how you will make money from the customer in the long term.

If you know how to manage relationships, this is one of the best ways to grow your business.

Till next time then.

Carpe Diem!!!

Losing hurts more than the joy of winning – Product and Brand Management – 2

B2B, ego, Fear, Human Brain, life time value, losing, Marketing, Product Management, winning

In yesterday’s post I spoke about how the human brain’s resistance to lose, makes the job tougher for a product management person to get a new product into the market. Nobody wants to be seen as a fool in case something goes wrong. The hurt of losing is very acute.

On the other hand there’s a positive side for the marketing person to utilise. Since marketing is applied psychology, you need to use this same concept to your advantage. That’s how brands are built. They are the trust / the promise that a user feels, when buying something from a known name (brand) versus buying an unknown name.

In the B2B space, therefore once you have entered into an account and done an excellent job, you need to spread your tentacles and try to do as many things as possible. Since the customer trusts you, they will prefer to first come to you to check out before going out into the market to find a new vendor.

So while getting into a B2B customer is tough, once there and if you have done an excellent job, the possibility of doing long term business is very high. So when looking at a B2B customer, you need to look at the lifetime value of a customer before taking any decision of refusing an order. Especially if it is at the time of entry into the account, you have to keep this dynamic in mind. Even if you have to make loss on a one time deal, for the first time, you should pick up the deal, provided you are clear that they do a lot of buying where they will involve you. You can then make up for the money you lose, by getting a logo to brag about in your brand building as well as the long term revenue possibilities.

You will also sometimes come across customers who will always want you to lose. For those types of customers, you should be ready to leave them at the earliest.

But coming back, the same feature of the brain which causes us hurt can also be used to increase revenues by ensuring that the customer realises why they trust you versus trying a new vendor.

Till next time then.

Carpe Diem!!!